MINUTES OF THE 51ST

MEETING OF THE BOARD OF TRUSTEES

OF EOBI HELD AT 10:00 HOURS ON SATURDAY, THE 15TH

JULY

2000 AT EOBI HEAD OFFICE, KARACHI.

The 51st Meeting of the Board of Trustees of EOBI was held on

Saturday, the 15th

July 2000 at 10:00 hours in the Board Room of EOBI

Head Office, Karachi. Mr. Farhat Hussain, Secretary, Labour, Manpower &

Overseas Pakistanis, Government of Pakistan, presided over the meeting.

2. The following attended the meeting:-

1. Mr. Farhat Hussain, President

Secretary, Labour,Manpower

& Overseas Pakistanis,

Government of Pakistan.

2. Mr. Salim Iqbal, Member

Joint Secretary (Insurance),

Ministry of Commerce,

Government of Pakistan.

3. Mr. Naguibullah Malik Member

Secretary, Labour Department,

Government of the Punjab.

4. Mr. Ghulam Sarwar Khero, Member

Secretary, Labour Department,

Government of Sindh.

5. Mr. Muhammad Riaz Khan, Member

Secretary, Labour Department,

Government of NWFP.

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6. Ch. Khurshid A. Aziz Member

Employers‟ Representative,

Punjab.

7. Mr. Arshad Tanveer Member

Employers‟ Representative,

Sindh.

8. Mr. Nooruddin F. Daud Member

Employers‟ Representative NWFP.

9. Mr. Majyd Aziz,

Employers‟ Representative,

Balochistan

10. Ch. Zaheer Ahmed Taj, Member

Employees‟ Representative, Punjab.

11. Mr. Nabi Ahmed Member

Employees‟ Representative, Sindh.

12. Mr. Muhammad Zaman Member

Employees‟ Representative, NWFP.

13. Mr. Abdul Rahim Mirdadkhel Member

Employees‟ Representative, Balochistan.

14. Mr. S. Barkatullah, Member

Chairman, EOBI

15. Mr. Abdul Majeed,

Officiating D.G. (F&I), EOBI Member

16. Mr. Javed Rashid Siddiqui, Member

Officiating Director General,

EOBI.

17. Mr. Muhammad Salim,

Deputy Director General Secretary, BOT

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3. The meeting began with a recitation from the Holy Quran by

Mr. Nooruddin F. Daud.

4. The President welcomed the distinguished members to the meeting

and apprised the participants that it was his first meeting after assuming the

charge as Secretary, Labour, Manpower & Overseas Pakistanis. He

expressed his commitment that with his 35 years experience gained by him,

he would discharge his responsibilities to the best of his ability.

5. Mr. S. Barkatullah, Chairman EOBI then placed the resolutions

regarding (late) N. A. Jaffery, former Chairman of the Institution,

Mr. Muhammad Zafarullah Khan, former President, BOT, Mr.Yousaf

Kamal, out-going President, BOT and Mr.Zafar Mahmoud, Ex-Financial

Adviser, EOBI, Ministry of Finance, Government of Pakistan, which were

unanimously adopted by the Board of Trustees (copies annexed as I-(a),

1-(b), 1-(c), 1-(d) to the Minutes). The Board then offered Fateha for all

those members who had served on the Board and were no more alive.

6. The Board then moved on to the agenda items and deliberated them

one by one.

ITEM NO.01

TO CONSIDER THE CONFIRMATION OF THE MINUTES OF THE

50TH

MEETING OF THE B.O.T. HELD ON 02.10.1999.

7. The minutes of the last meeting of the Board were taken up for

confirmation. The President enquired as to whether any objection to the

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minutes had been received. He was apprised that a clarification sought by

Mr. Salim Iqbal, Joint Secretary, Ministry of Commerce was made to him

separately. Thereafter, the minutes, with this clarification, as approved by

the President, were accordingly confirmed.

ITEM NO.02

TO CONSIDER REPORT ON ACTION TAKEN ON THE

DECISIONS TAKEN IN THE 50TH

MEETING OF THE B.O.T.

8. The Board expressed its satisfaction on circulation of lists of

establishments to the representative of the employers and employees of

Punjab, Sindh, NWFP and Balochistan. Mr. S. Barkatullah apprised the

participants that in view of voluminous document of establishments, the

Institution is converting it on diskettes, which could be viewed on computers

easily. Ch. Zaheer Ahmed Taj stated that these lists needed further

improvement. He also pointed out that lists contained the names of even

those establishments, which had been closed down or have disappeared

having a considerable number of registered Insured Persons. Mr. Nabi

Ahmed apprised that the relationship of the workers who worked in closed

or disappeared units did not sever connection with the Institution. That was

why the name of those establishments were appearing in the lists of

establishments. He further added that it was the main reason he had been

emphasizing that while de-registering the establishments, the particulars of

workers of those units must be secured by the Institution.

9. The President desired to know the system/mechanism of de-

registration. Mr. S. Barkatullah informed that de-registration of

closed/disappeared establishments was a continuous process. It was, as per

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procedure, undertaken after thorough checking of record of government

agencies in this respect. In some cases physical verification of those

establishments by the Committee appointed by the Board of Trustees is also

carried out for this purpose. This Committee consists of Zonal Heads,

representative of Employers & Employees of concerned province. He also

appreciated the personal interest & efforts taken/made by Mr. Arshad

Tanveer as one of the members of these Committees in de-registering such

establishments. While narrating his experience in this respect, Mr. Arshad

Tanveer suggested a clear-cut policy/guidelines in the matter of de-

registration of units particularly in view of non-availability of complete

record regarding closure of establishments and insured persons working in

such establishment etc. Ch. Khurshid A. Aziz desired that this depended on

nature of industry and no clear-cut guidelines be devised rather a common

sense approach would be sufficient in the matter. Mr. S. Barkatullah

apprised that, to avoid these difficulties, the Institution had proposed, in its

Expansion Scheme, which is under active consideration of the Federal

Government, to cover every establishment even employing one person

under Shops & Establishments Ordinance, 1969. Under the said Ordinance,

reliable information regarding the status of closure/registration of new

establishment etc., was available. Mr. Naguibullah Malik, also supported the

need for professional input and documentation of total workforce.

Mr. Nooruddin F. Daud emphasized the need for educating the employers to

cooperate with government agencies in this respect. He also endorsed the

views of Mr. Naguibullah Malik that there was a dire need for development

of national data base of Industrial and Commercial establishments and

particulars of workforce working in those establishments. Mr. S.

Barkatullah informed the participants that for development of the data base

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and creation of documentation of total workforce, a reliable base has to be

selected for this task i.e. to develop the national data base of establishments

and workforce of the country. The only reliable information available

regarding establishments and workforce is available under Shops and

Establishments Ordinance, 1969 in the country. The Institution, based on

recommendations of Task Forces appointed by the previous Governments

and in consultation with Actuaries, has developed a comprehensive,

progressive pension scheme. That has merit of simplification in

implementation keeping the low literacy rate in view in the country. The

scheme allows progressive increase in the rate of contribution and pension

over a period of 5 years, with a feature of revision for next 5 years‟ period

on advice of the actuarial valuation report. The coverage is aimed to extend

every establishment even employing one person registered under Shops and

Establishments Ordinance, 1969. It is expected that such an arrangement

would not only simplify the scheme, but it would also provide a reliable base

to develop data base available under Shops and Establishments Ordinance,

1969. This arrangement would hopefully reduce malpractice and

harassment by the officials of the Institution and would reduce the contact

with and access to the books of accounts maintained by the employer. He

continued that he and other officials of the Institution held meetings

with General Ihsan Zahid, Chief of NADRA and his associates, who also

appreciated the efforts being made by the Institution and assured of the

extension of his full cooperation to the Institution in this regard. Mr. Majyd

Aziz desired to equally emphasize the registration of employer and

employees. He also supported the view points of M/s. Naguibullah Malik

and S. Barkatullah that the Institution should also benefit from NADRA.

Mr. S. Barkatullah pointed out that since independence no documentation

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was carried out on national level. The progressive contribution

rate/progressive benefits as proposed in the Expansion Scheme should also

be implemented to improve the deteriorating financial health of the Scheme

owing to withdrawal of matching government contribution and increase in

minimum pension from Rs.425 to Rs.630 without proper funding alternative.

EOB Scheme had best variety of benefits wherein widow continued to draw

pension even after she re-married. He also pointed out that publicity to

educate the employers would have to be done through T.V. and the

Institution would plan and launch a full-fledged publicity programme, as and

when the proposed pension scheme was cleared by the Federal Government.

10. Mr. Nabi Ahmed desired that a Research Division may be established

in the Institution, to carry out necessary studies on various pension schemes

of the world and on relevant local aspects and keep close coordination with

International Agencies, such as ILO & ISSA. Mr. S. Barkatullah informed

the Board that there is a post of Actuary in the grade of Deputy Director

General. As and when it was filled in, he would be given the task of

establishing Research & Actuarial Division in the light of the manpower

study being conducted by the management consultant appointed for this

purpose. He also desired that Computer Division of the Institution also

needed to be properly equipped in terms of manpower as well as equipment.

11. The Board decided that:

i) all the members of employers and employees should forward their

comments on the lists of establishments circulated among them for

improving the same on the part of the Institution within 30 days from

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the date of this meeting. The Board also formulated a Committee

consisting of one member each from the Institution, employers and

employees to scrutinize the comments received on list of

establishments and report its findings in the next meeting of the Board

of Trustees.

ii) The Board also proposed to link the IT Plan contained in the working

paper annexed to the Minutes of the F&A Committee Meeting dated

30.06.2000 with the business process/management study being carried

out by M/s. Sidat Hyder Morshed Associates (Pvt.) Limited.

iii) It was unanimously decided that, to simplify the procedure, avoid

malpractice & reduce hassle in the execution of scheme and save the

EOB Scheme from financial disaster, it is need of the hour that

immediate steps should be taken to implement the proposed

progressive pension scheme, which was developed on the

recommendation of Task Forces and on the basis of sound actuarial

advice, and had already been cleared by the Ministry of Labour,

Manpower & Overseas Pakistanis having the following main

features:-

(a) Progressive contribution rate.

(b) Progressive increase in benefits rate.

(c) Extension of coverage to every establishment even employing

one employee registered under the Shops and Establishments

Ordinance, 1969.

iv) Thereafter, the Board adopted the report on the decisions taken by the

Board in its last meeting.

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ITEM NO.03

TO CONSIDER PERFORMANCE OF THE INSTITUTION.

12. The President invited Mr. S. Barkatullah to present performance of the

Institution before the Board Members. Mr. S. Barkatullah informed that

economic depression and shuttering down & other elements affected

economic, business and commercial activity of the country. It is pertinent to

mention here that the Institution put in all out efforts not only to achieve the

given target, but also surpassed it by 7% despite all odds. The Board

allocated a target of Rs. 1430 million for collection of contribution from

employers for the year 1999-2000, as against the target of Rs. 1378 million

for the previous years. Though the target was 3.77% higher than the

previous year, the performance of surpassing it by 7% is highly satisfactory.

He continued & stated that the Institution had implemented the directives of

the Chief Executive of Pakistan regarding enhancement in the minimum

Pension from Rs.425 per month to Rs.630 per month w.e.f. 1st January,

2000 in letter and spirit. The Institution devised a simple methodology to

disburse the pension with the assistance of Bank officials, which ensured

prompt & complaint free payment of pension to over one lac pensioners in

the shortest time, spread in every nook & corner of the country. Generally,

most of the pensioners draw their pension on monthly basis some of them

draw their pension by accumulating for one to two months and the rest after

a quarter or so. It was worthmentioning that about 70% pensioners had

already drawn their pension alongwith arrears without any inconvenience.

He suggested that a note of appreciation for prompt & complaint free

payment of pension to the pensioners by Habib Bank may be placed on

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record. The Board adopted the recommendations of the F&A Committee for

placing on record its appreciation for efficient, quick and complaint free

disbursement of enhanced pension in implementation of the directive of the

Chief Executive and approved the resolution to be conveyed to them in this

regard (Annex-II).

13. Regarding break-up of contribution into contribution due and arrears,

Mr. S. Barkatullah informed that it was very difficult exercise, however, the

Institution would undertake it. So far as awarding of assignment regarding

giving different yardstick measures at various stages of development of EOB

Scheme from the International experience in terms of reference of the

Actuaries, the Board adopted the same for inclusion in the terms of reference

of Actuaries.

14. The Board highly appreciated the achievements of the Institution and

adopted the performance report of the Institution.

ITEM NO.04

TO CONSIDER CONFIRMATION OF FINANCIAL STATEMENT

FOR THE YEAR 1998-99 APPROVED BY CIRCULATION UNDER

RULE 16 THE OF EOB (BOT) RULES, 1977.

15. The Audited Accounts for the year 1998-99 were placed before the

Board for consideration and approval as recommended by the F&A

Committee meeting held on 30.06.2000.

16. As recommended by the F&A Committee, the Board decided that in

future the annual accounts of the Institution would be placed before the

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Board in regular BOT Meeting instead getting the same approved by

circulation unless the approval by circulation is absolutely necessary. The

Board then confirmed the audited annual accounts of the Institution for the

year 1998-99 as already approved through circulation.

ITEM NO.05

TO CONSIDER THE REVISED BUDGET ESTIMATES FOR THE

YEAR 1999-2000 AND THE PROPOSED BUDGET ESTIMATES FOR

THE YEAR 2000-2001.

17. The Board then took up consideration of revised budget estimates for

the year 1999-2000. While reviewing the contribution target, the Board

noted with satisfaction that the Institution had exceeded the contribution

collection target of Rs.1430 million by 7% to Rs.1530 million and approved

the revised contribution target of Rs.1530 million for the year 1999-2000.

(Annexure iii(c))

18. The revised revenue expenditure for the year 1999-2000 amounting to

Rs.291.303 million, as recommended by the F&A Committee, was approved

by the Board as per Annexure-III (a).

19. While considering the revised capital expenditure for the year 1999-

2000 the Board noted that an amount of Rs.280 million was included in the

revised capital budget. It was informed that since the amount could not be

utilized in 1999-2000, the F&A Committee had already recommended the

same to include in the proposed budget for the year 2000-2001.

Accordingly, the Board approved the revised capital budget for the year

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1999-2000 amounting to Rs.48.303 million as recommended by F&A

Committee as per Annexure-III (b).

20. While considering the proposed budget estimates for 2000-2001, the

Board was informed that the proposed contribution target of Rs.1475 million

may be revised upward to Rs.1550 million in view of collection of Rs.1530

million as contribution from the employers during the year 1999-2000. The

Board then approved the contribution target of Rs.1550 million for 2000-

2001 as per Annexure-III (c).

21. While considering the investment income of the Institution, Ch.

Zaheer Ahmed Taj mentioned that the Institution should strive to invest

funds in those secured avenues where the investment yield might be

maximized. Mr. S. Barkatullah explained that the Institution had mostly

invested in government securities, but since the investment in National

Saving Schemes have been banned since 25th March 2000 by the

Institutions, the EOBI is investing its funds in Habib Bank Limited as a

temporary arrangement. He further stated that he took personal initiative for

development of long-term government instrument to fill the gap by banning

of investments in National Savings Schemes with Governor State Bank of

Pakistan and held several meetings with him. It is likely that the government

is soon to issue investment bonds and then the Institution will again start

investing in government securities.

22. Mr. Majyd Aziz enquired about losses in share-holdings and stated

that Rs.28.50 million in shares have reduced to Rs.7.08 million and whether

the Institution was still investing in shares. Upon this it was explained that

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this investment was made in 1994, when the share-market was in boom.

After that, no investment in shares was made and the present holdings will

be disposed off as and when the market prices equal the cost of shares held

by the Institution is obtained.

23. After this, the Board approved the revised investment income of

Rs. 5526 million for 1999-2000 and proposed investment of Rs.5654 million

for 2000-2001.

24. As regards increase in medical expenses from the approved budget of

Rs.18 million to Rs.23 million, Mr. S. Barkatullah explained that the

increase was due to cases of serious illnesses of cancer, hepatitis-C and heart

surgery. A list of such cases with financial implications over Rs.5 million

was also circulated among the members in the meeting.

25. Mr. S. Barkatullah further stated that since the medical facilities being

extended by the Institution were quite liberal and prone to misuse, he

proposed that, in order to discourage the tendency, to apply for

reimbursement after incurring the expenditure which in some cases

amounted to Rs.300,000/- to Rs.500,000/- in single cases, the officials

entitled to medical facilities should be advised to avail the facilities of

hospitals and clinics on the panel of the Institution and reimbursement

should be limited to Rs.100,000 in a single case.

26. After some discussions, the Board decided that a detailed working

paper on medical expenditure with recommendations to prevent the misuse

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of the facilities and keep the expenditure within budgetary allocations should

be put up in the next Board Meeting.

27. As regards allocation of Publicity Budget of Rs.5 million, the Board

approved the recommendations of the F&A Committee that Publicity

expenditure should be incurred with the concurrence of the Publicity

Committee which should formulate the publicity programme of the

Institution.

28. The Board approved the proposed revenue expenditure of Rs.327.824

million for the year 2000-2001 as recommended by F&A Committee as per

Annexure-III (a).

29. While considering the capital budget for the year 2000-2001, the

Board approved the inclusion of Rs.280 million on account of purchase of

KDA Commercial Complex including inter-alia payment of 50% balance

payment to KDA amounting to Rs.99 million plus interest @ 11% per

annum from 1994 to the date of payment. The remaining amount will be

utilized for transfer/lease expenses for transfer of title, adjustment of

advance payment and expenditure on the Complex by the Institution so far.

The Board then approved the proposed cost of expenditure on capital

items/goods of Rs.394.990 million for the year 2000-2001 (Annexure-III (b).

30. While considering the budgetary proposals, Ch. Zaheer Ahmed Taj

proposed that the budget meeting should be confined to only the budgetary

proposals so that sufficient discussion may be held in view of the importance

of the matter. Upon this, the Board decided that in future the budget

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meeting will be confined only to the budgetary proposals along with

confirmation of minutes, report on actions taken and performance of the

Institution.

ITEM NO.06

TO CONSIDER RECOMMENDATIONS OF F&A COMMITTEE

HELD ON 09.03.2000 AND 13.04.2000.

(a) To consider procedure and system for payment of enhanced

minimum pension and arrears w.e.f. 01.01.2000.

31. The Board has already considered the issue in detail under item No. 3.

(b) To consider acquisition of assets in any form held by the Bankers

Equity Limited (BEL) to protect its deposits and accrued interest

thereon.

32. Necessary steps to acquire the property in lieu of deposits of the

Institution on their refusal that they did not have capacity to pay its deposits

in cash or liquidity and the Institution had already quoted Rs.292 million of

carpet area of 39,383.19 sq. ft. (total chargeable area of 81,349.89 sq. ft.).

The BEL officials considered this quoted price a throw-away price. It was

decided in the 42nd

meeting of the Investment Committee held on 24th

June,

2000, that the Institution should protect its interest and invest in the real

estate transparently, which is backbone of pension fund allover the world,

and the Institution should acquire the premises within price range as

determined in valuation of that premises by M/s. NESPAK, who are

qualified contractors and are operating under the Ministry of Water &

Power. However, a written reply from the BEL is still awaited. As per final

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valuation of consultants, M/s. NESPAK, the total cost of First floor comes to

Rs. 416.35 million as per the following break up:-

Tower „C‟

First floor front portion 37,182.60 sq. ft. = Rs. 199.93 million

@ Rs. 5,377/- per sq. ft.

Tower A&B

Back portion 44,166.78 sq. ft.

@ Rs. 4,900/- per sq. ft. = Rs. 216.42 million

Rs. 416.35 million

===========

33. The Board appreciated the efforts being made by the Institution to

recover its investment from the BEL in the shape of prime/valuable

property held by the BEL and also confirmed the recommendation of the

F&A Committee for acquisition of the said premises within the price range,

as determined by M/s. NESPAK in their valuation from the BEL.

(c) To consider `terms of reference` in respect of Statutory Actuarial

Valuation of Assets and Liabilities of EOBI Fund as on 30.06.1999

34. The Board approved the appointment of M/s. Sidat Hyder Morshed

Associates (Pvt.) Ltd., for conducting the Statutory Actuarial Study of the

Fund and Management Study of the Institution and Manpower Study of

Head Office/Divisions/Wings with suggestions for improvement (Right-

Sizing) as per above lines and should also include the determination of

proper yardsticks for measuring performance of the Institution from the

international experience at various stages of progress of the EOB Scheme on

total professional fee of Rs.1.350 million. The time frame for the

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management study and manpower study would be around two months

whereas the actuarial study would take three to four months to complete.

(d) To consider Expenses Ratio vis-à-vis Benefits Paid (i.e.

Administrative Expenses over Benefits Paid)

35. The Board expressed its satisfaction as the Institution is operating

within the approved budget/yardstick of administrative expenses. While

calculating the ratio of administrative expenses to income, the Institution

should consider the same on aggregation of contribution collection and

investment income and should try to remain within the cost of administration

as per formula given by Actuaries in their 1994-95 report. The Board agreed

to the formula given by Actuaries in the said report (Annexure-IV).

(e) To consider recovery of Arrears from Punjab Road Transport

Corporation (PRTC).

36. Regarding acquisition of prime/valuable properties held by Punjab

Road Transport Corporation, Karachi Transport Corporation, SRTC in case

of non-recovery of arrears in cash, the Institution should expedite its efforts

in acquisition of the same. Mr. Naguibullah Malik informed that he would

provide support in assisting the Institution in the acquisition of properties

held by PRTC in lieu of its arrears of contribution due against them. The

Board desired that officials of the Institution should make personal efforts in

this respect, as the matter has already been delayed and to the best

knowledge of its members, Punjab Road Transport Corporation had already

sold out its most of the properties.

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(f) To consider the proposal regarding extension of benefits to

workers engaged in seasonal industries

37. The Board approved the:-

(i) Extension of pensionary benefits to seasonal workers as recommended

by the F&A Committee for amendment by notification in the gazette

through Labour Division (Annexure-V);

(ii) the removal of anomaly in granting pension to the widow of insured

person who died during his service and the widow whose husband

died after he had availed benefits for amendment in EOB Act by

gazette notification through Labour Division (Annexure-VI);

(g) To consider release of balance payment with interest towards

acquiring of KDA Commercial Complex (Awami Markaz,)

Karachi.

38. Regarding acquisition of KDA Commercial Complex (Awami

Markaz, Karachi), the Board adopted the recommendation of F&A

Committee and kept a provision of Rs. 280 million in the proposed budget

for the year 2000-2001 under item No. 5.

(h) To consider investment of the Institutions’ Funds with

Army Welfare Trust ( The AWT).

39. The Board considered the comments recorded in the minutes of the

F&A Committee‟s Meeting held on 30.06.2000 i.e. the officials of the AWT

did not contact to the Ministry as pointed out by Malik M. Zahoor Anwar.

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In spite of the fact that the minutes of the meeting held under the

Chairmanship of Federal Minister with officials of AWT held on 22.05.2000

were supplied to the Chief Executive Secretariat. Unless they contacted, the

Ministry would not take any initiative on its own. The Board expressed its

satisfaction on this explanation.

(i) To consider appointment of Auditors:

40. The Board has already appointed the auditors vide Item No.9.

(j) Resolution to appreciate the valuable services rendered by

the retiring Director General associated with the Institution.

41. The Board of Trustees adopted the resolution (Annexure-VII), as

recommended by the F&A Committee‟s meeting dated 13.04.2000.

ITEM NO.07

TO CONSIDER ANNUAL REPORTS OF THE INSTITUTION FOR

THE YEARS 1995-96, 1996-97 AND 1997-98.

42. The Board adopted the recommendation of the F&A Committee

regarding approval of annual reports for the years 1995-96, 1996-97 and

1997-98 for submission to the Federal Government.

ITEM NO.08

TO CONSIDER THE RE-CONSTITUTION OF SUB-COMMITTEES

OF THE BAORD OF TRUSTEES.

43. The President informed the participants that the Board of

Trustees reflected a collective wisdom; whereas Committees are constituted

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to facilitate the work of the Board of Trustees. The size of the Committee is

very important in effective utilization of the Committee. These Committees

are working for the last 25 years smoothly. If the size of the Committee is

widened, it would become a Mini Board, which was not the intention of

creation of these Committees. Mr. Arshad Tanveer pointed out that for

effective participation of the members; the F&A Committee suggested the

inclusion of all provincial members of employers & employees.

44. After some discussion the Board decided that the size of the

membership of the F&A Committee would remain the same. However, the

representatives of the employers and employees would be changed

according to the province in which its meeting would be held. So far as size

and re-constitution of other committees are concerned the Board adopted the

proposals with slight amendments in the constitution of the existing

Standing Committees of the Board, as contained in the working paper

(Annexure-VIII).

ITEM NO.09

TO CONSIDER THE APPOINTMENT OF EXTERNAL AUDITORS

FOR THE YEAR 1999-2000.

45. The President informed that for completion of audit work in time, it is

necessary that Board should appoint the external auditors without further

delay. Mr. Naguibullah Malik desired that a reputed firm may be appointed

in view of spirit of Institution‟s fund. It was also informed to the Board that

auditors once appointed may continue for the next five years subject to their

appointment on annual basis by the Board. After some discussions, the

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Board approved the appointment of M/s. Ibrahim Sheikh & Company who

had already audited the Institutions‟ Accounts during early 80‟, for the year

1999-2000 at a professional fee of Rs.55,000/= plus out of pocket expenses

of Rs.13,000/= totalling to Rs.68,000/=. The renewal of their term for next

audit would be reviewed by the Board in the light of their audit performance.

ITEM NO.10

TO CONSIDER DRAFT “ The EMPLOYEES’ OLD-AGE BENEFITS

(ACTUARIAL VALUATION) RULES, 2000”.

46. The Board approved the recommendation of F&A Committee

regarding approval of draft “ The Employees‟ Old-Age Benefits (Actuarial

Valuation) Rules, 2000” for publication in the official gazette after having

the draft vetted by the Law Division, Government of Pakistan through

Labour Division (Annexure-IX).

ITEM NO.11

ANY OTHER ITEM.

(I) TO CONSIDER MANPOWER ASSESSMENT OF THE

INSTITUTION BY M/S. SIDAT HYDER MORSHED

ASSOCIATES (PVT) LTD.

47. The Board approved the study of manpower on the following lines:-

(i) Existing recruitment/selection process be deferred. Determination of

optimal requirement of manpower and its quality vis-à-vis work load

and their functional fields be assessed by the consulting actuary;

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(ii) Existing required qualification for various posts, recruitment/selection

procedure in the course of management study be reviewed and

rationalized;

(iii) Direct Quota Posts thus determined by the Management Consultants

may be advertised for filling the same through open competition on

the recommended recruitment/selection process;

(iv) This will maintain the transparency in recruitment/selection procedure

and will cater for the right-sizing of the Institution.

(II) TO CONSIDER EXTENSION OF MEDICAL FACILITIES TO

OFFICIAL MEMBERS OF BOT

48. The issue of extension of medical coverage to the official members of

BOT, serving/retired, as recommended by F&A Committee of BOT, was

discussed, but not agreed.

III) TO CONSIDER EX-POST FACTO APPROVAL OF EXPENSES

INCURRED BY THE INSTITUTION FROM 01.07.2000 TO

15.07.2000.

49. Mr. S. Barkatullah informed the participants that 51st Meeting of the

Board could not be held before 30.06.2000 in view of change in the

President of the Board and occupation of the new President in official

matters. In order to run the day to day affairs smoothly, the Institution had

incurred expenditure from 1st July 2000 to 15th

July 2000 and desired for ex-

post facto approval for the same out of Budget of 2000-2001. The Board

considering the unavoidable conditions accorded the ex-facto approval for

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the expenditures incurred from 01.07.2000 to 15.07.2000 out of the

proposed budgetary provisions for the financial year 2000-2001.

(IV) WORKING PAPERS SUBMITTED BY CH. ZAHEER AHMED

TAJ FOR CONSIDERATION OF THE BOARD.

50. The President allowed to circulate the paper submitted by Ch. Zaheer

Ahmed Taj and was discussed at length item by item. The detail of

discussion is given as under:

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a) Conversion of Gilgit Field Office into Regional Office and opening

of Field Offices at Skurdu, Muree and Toba Tek Singh.

51. Mr. S. Barkatullah informed that these offices have already been

opened considering the number of insured persons, contribution income,

administrative cost and other factors. Since the Institution is a social service

oriented organization, the prime objective of opening small offices is to

provide service to the insured persons/pensioners to the nearest/ at their door

steps to avoid hassle and inconvenience.

(b) Proposed budget for the year 2000-2001 including medical facility

to the employees, employees welfare, transportation charges, late

sitting charges, bank services charges

52. The board was informed that administrative cost is being calculated

vis-a-vis investment income, which comes to around 5 %. He added that as

per actuarial study the expenses per insured person were projected as

Rs.120/- per annum per insured person and Rs.240/ - per pensioner, which

would grow 85% of the inflation rate according to date. The figures for the

year 1999-2000 comes to Rs.167/- per insured person and Rs.333/- per

pensioner as against the estimated expenditure for the year 1999-2000 of

Rs.307 million. Whereas, according to the revised budget estimates, the

total revenue expenditure of the Institution is estimated at Rs.288 million,

which is 6% less than the expenditure computed by the Actuaries.

53. The Institution is managing its country-wide operations including

Azad Kashmir and Northern Areas with a manpower of slightly over one

thousand employees; as against one officer, there is one staff member.

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Whereas, the situation in other similar organizations is that for one officer

there are 5 staff members. So far as Bank Charges are concerned the

Institution has an arrangement with HBL not to charge any service charges

on collection of contribution and remittances/receipts from/to Zonal/Head

Office.

(c) The revised budget for 1999-2000

54. The position has already been explained in the above paras.

(d) Investments

55. Mr. S. Barkatullah stated that he had several meetings with Governor,

State Bank of Pakistan and the government is soon to issue investment

bonds and then the Institution will again start investing in government

securities placing all of its funds in this instrument of investment. Till then

it will continue to keep its funds @11% special deposit account with Habib

Bank Limited in terms of investment tools, HBL is a guaranteed bank. As

such its deposits are guaranteed by the Federal Government of Pakistan.

Before placing the fund with them the Institution also invited NBP and UBL

being guaranteed banks to provide lucrative rates but they did not turn up.

The experience of stock market was also not very good though the

Institution invested in blue check with the advice of NIT who are experts of

the Stock Market. He apprised that its investments of 50 millions in shares

reduced to 22 million. Thereafter, the Institution stopped further investment

in the stock market and now it is off loading the shares as and when it

receives its cost price from the market.

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(e) Contribution/working paper No. 1 (PR-03 and deficiency in PE-01

and PI-03/working paper No. 2 Works Standard Strength

(workers per factory)

56. The Institution will examine the matter and the same is included in the

business process and management study being carried out by M/s. Sidat

Hyder Morshed Associates (Pvt.) Limited.

(V) Suggestion by Mr. Abdul Rahim Mirdad khel

57. Mr. Abdul Rahim Mirdad Khel also submitted some suggestions

about the welfare of mine workers in writing, which will be reviewed by the

Institution. Mr. S. Barkatullah informed the Board that extension of

coverage to mine workers in Baluchistan has been under active

consideration of the Institution. In this connection, the Chairman EOBI had

contacted the Secretary, Labour Department, Chief Secretary, Baluchistan,

and the Governor of the province and apprised them of the fact that the mine

workers are actually the responsibility of mine owners who pay them

compensation in the event of death/accident and JOORISAR, contractor is

only a supplier of manpower. The subject matter is before the Provincial

Cabinet, which needed to be expedited.

58. While concluding the meeting, the President of the Board appreciated

the active participation of the members in the affairs of the Institution.

M/s. Naguibullah Malik, Nooruddin F. Daud and Zaheer Ahmed Taj placed

on record their appreciation for the manner in which the meeting was

conducted in which every member was provided the opportunity to express

his views candidly.

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59. The Board decided that its next meeting will be held on 16th

September 2000 at Peshawar.

60. There being no other item/matter, the meeting ended with a vote of

thanks to the Chair.

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